Can Bitcoin pay the bills?

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​​​​​​What is a Bitcoin really worth and can you make use of it in the real world? asks Jake Smith.

Recent news headlines have been dominated by Bitcoin and rightly so, when the value of something increases by 100% in a single day, who wouldn’t want to know about it! However, instead of analysing whether or not Bitcoin is a sound investment and to avoid adding to the hysteria of the Bitcoin bubble, we take a look at it from a different angle; can Bitcoins be used to pay your bills?

First of all, let’s decipher what on earth both Bitcoins and cryptocurrency are. In its simplest form, Bitcoin, like money is an accounting system. An electronic cash system that is fully peer-to-peer, with no trusted third-party or central depository. Cryptocurrencies are digital currencies that are secured using complex algorithms, known as ‘cryptography’. Bitcoin was the first cryptocurrency powered by Blockchain software technology – a tracking system.

Essentially, Blockchain acts as a public ledger that records and verifies all transactions chronologically. The digital recording of value and transactions is permanent, but people’s identity remains anonymous. The open ledger replaces the need for a third-party facilitator i.e. banks and governments. What this means is that there is no control by a single institution, rather the control is put back on the network of users. Money is easily transferrable and executed from peer-to-peer. The concept also removes associated fees, inefficiencies, risk and the potential for corruption that come with centralising information as a third-party.

Ironically, the first bitcoin was created in January 2009, just months after the global financial crisis (GFC) struck. Since launching, many new cryptocurrencies and alternative coins ‘altcoins’ and ‘tokens’ have been created using similar Blockchain technology.

Australian retailers are increasingly adding digital currency as an accepted means of payment. At the time of writing, there were approximately 15,000 worldwide retailers accepting cryptocurrency, 264 of whom are based in Australia, according to Coinmap.

Some of the things you can spend your Bitcoins on include:

Coffee and pastries

Jewellery

Alcohol

Travel and flights (Expedia)

Web hosting

Real estate

Software and electronics (Microsoft)

Energy, gas and electricity

Making donations

There is a growing list of goods and services available for purchase using cryptocurrencies, which you can discover using Bitcoin.com’s search platform. More specific to Australia, a number of bills can indeed be paid using Bitcoins through various websites. One of the more popular websites is “Living Room of Satoshi”, which is a Brisbane-based start-up enabling people to easily make credit card, BPAY, or direct bank account payments using a dozen different types of cryptocurrency.

Merchants and individuals are flocking to Bitcoin as the cryptocurrency gains more and more mainstream appeal. The longer bitcoin hangs around and continues to make headlines, the more comfortable people are going to become with digital money – more directly, confident in the notion of using bitcoin for day-to-day exchanges.

Further developments, particularly to Blockchain technology, will add legitimacy and user-confidence for existing and prospective participants of the Bitcoin world. However, without regulation and safeguards for the virtual currency, it’s difficult to see Bitcoin taking over traditional conventions of trade. Although if you’ve got bitcoins to spend there’s a number of sites that cater for the crypto-payment option, feel ready to use them to make a purchase or square your outstanding bills.

Sometimes life throws you curve balls – the loss of a job, a partner or unexpected medical emergency can deplete savings and leave you struggling with debt. Seeking assistance is the first step towards solving your financial woes.

Use your bank, credit card statements and utility bills to get a full understanding of what you are spending, where and when.

Don’t wait ‘til you are behind in payments to try to sort things out.

We all know it is important to ensure we’re safe guarded against any unexpected health issues. Any of us could have a medical emergency at any time and we need to ensure both we and those we love can be taken care of, if needed. While it is impossible to know exactly how much you might need to cover both medical expenses and loss of income during a period of illness, there are things we can do to ensure we are ok.

That’s why knowing what you are available to access through Medicare and if suitable, also purchasing health insurance and regularly examining different plan options is a good idea.